By Dr Ali Akbar Dhakan, Karachi, Sindh
Being the mainstay of Pakistan economy, Agriculture sector was prioratized particularly by the first civilian Govt. of Paksitan during seventies, in order to boost agricultural production and to increase the per acre
yield (PAY) of main staple crops viz a viz improving the living standard of farmers being neglected since independence and put foundation to formulate policies for easy, adequate and timely disbursement of agricultural credit to the needy farmers so that they can utilized proper inputs to their seasonal crops and yield more and more for the betterment of their own and the nation at large.During eighties also the same policies continued but after mid ninties the start of neglecting the agriculture sector was observed.During Seventies and eighties surveys, research studies were conducted and many new schemes like inter-free seasonal agricultureal loans, pass book system, revoling agricultural credit system, increase in per acre produce index units, SBP gurantee schemes, fixing mandatory targets for agriculture credit to all the nationalized commercial banks and ADBP, Faderal Bank for cooporatives, through provincial Cooporative banks etc, the volume of agr. credit disbursement was enhanced from Rs. millions to Rs. trillions.The defaulting NCBs not meeting the mandatory targets, were being penalized.SBP used to sanction credit lines at the miminal interest rates to ADBP and FBC which never felt liquidity crunch for the disbursement and the SBP used to allocate agriculture credit annually on the very net increase basis of total credit outstandings.But now the position of the availability of agricultural credit is that every branch of ADBP (ZTBL) is not in a position to give monthly salaries to all its staff or employees where as new credit disbursement has been linked with the recovery of outstanding loans which has been very difficult and problematic for every branch of the ZTBL because of the fact that revoling credit system has raised the problem as every farmer wants to get his loan re-adjusted and the recovery of loans has become impossible it is because of the credit crunch of position of the branch, monthly salaries to the staff has been stopped in some places even for five-six months.On the other side the SBP agricultural credit Depart. has exagerately and extravagantly boasted in the monthly SBP News for the month of febuarary 2009 as follows:
1.Agricultural credit disbursement, in absolute terms, rose by Rs 9.171 billion in july-december, 2008 period when compared with disbursement of Rs.90.277 billion during the same period of the last fiscal year(2007-08).
2.Overall credit disbursement by five major commercial bank including Allied Bank Limited (ABL), Habib Bank, National Bank of Pakistan(NBP) and United Bank Limited(UBL) stood at Rs.48.635 billion during july-December, 2008 period, compared with Rs. 44.914 billion during the same period of the last fiscal year, depiciting an increase of Rs.3.721 billion or 8.28 per cent.
3.Zarai Taraqiati Bank limited (ZTBL), the largest specialized bank, has disbursed Rs 27.44 billion in July-December, 2008 period, compared with Rs.23.871 Billion during the same period of the last fiscal year,
4.While disbursement by punjab Provincial Cooporative Bank LImited (PPCBL) stood at Rs.2.179 billion in July-December, 2008 period, compared with Rs.2.402 billion during same period last fiscal year.
5.Besides, 14 domestic private Banks (DBPs) also loaned a combined Rs.20,889 billion in July-December, 2008 period, up 9.42 per cent when compared with Rs 19.090 billion disbursed in July-December, 2007 period.
From this above statement, it looks that disbursement of agricultural credit has increased from year to year where as the remarks of all the farmers individually and through their Associations, Unions and Farmers Forum was that (i)throghout the District no disbursemnet of credit has been extended by major banks or old NCBs, Domestic Private banks (DBPs) and Cooperatives.
(ii)Sofar ADBP or ZTBL is concerned, they all cried with their loud voice to the Chief Guest MNA Mrs Nafeesa Shah and all sitting executives of SBP and other banks at the stage that ADBP is not a credit giving institution but it has become skin scratcher for the farming community.
(iii)They cried and produced documents to Nafeesa Shah in regard to some cases of sanction of credit on the basis of some IDs of farmers who never got loans from them.
(iv)in order to save their skin the managers of ADBP, re-adjusted loans given on revolving basis in the month of December 2008 and re-adjusted it in February 2009 only after 3 months of the disbursement of such loans.
(v)Due to such practices, recovery of loans has been minimal and not only new disbursement of loans has been impossible but even the staff or employees of the branches are facing problems for the payment of their monthly salaries.
(vi) In some branches, a middle man is hired and taken the amount of loans to be recovered from the farmers and after re-adjustment of their outstanding loans, they are sanctioned new loans on revolving credit basis and pay back the amounts to the hired banya ( a local hindu) with an additional amount as interest or markup and the residual amount sanctioned as new loans is pocketed by the credit officers and the manager of the branch.
(vii)God knows to whom, such a big amount of Rs.92 Billion is disbursed where as in Sindh, the position is very similar as stated in the Sindh Khairpur Agr. credit Seminar held on 7th March 2009.I was invited as an expert in the said seminar and I attended it being an experienced person in the field.
(viii)The cooperative credit system in Sindh has been stopped where as in the Punjab it exists and an amount of more than 2 billion was disbursed by the punjab Provincial Cooperative Bank (PPCB) to be provided by the State Bank of pakistan as annual credit line where as Sindh has been deprived of this facility since 1990.
(ix)During the Seminar period, the cries and complaints appeared in such a volume that MNA Nafeesa Shah felt dejected and vowed to take the matter with the concerened authorities but nothing has so far been done as yet.In the light of above observations appeared in the Seminar the following steps may be taken.
(i)For the equal disbursement of agricultural credit system in all provinces, a commitee may be set up in the Provincial Finanace departments to check the actual disbursemnet of credit and suggest measures to take disciplinary actions against the delinquent banks and even State Bank authorities for their negligence.
(ii)State Bank should establish a research studies centre where regular studies of the disbursed loans and the related problems may be conducted in the Coordination with the Finance, Agriculture and planning departments of all provinces.
(iii)Cooporative Credit System may again be revived in Sindh and two provinces where this system does not work.
(iv)All the chambers of Agriculture may be authorized and strenghtened to keep vigilance on the disbursement of loans as disclosed by SBP.For streamlining the managemnet of ZTBL, the following suggestion are given for their immediate implementation:
The ADBP has been white elephant of Islamabad .All might has been concentrated at Islamabad.Even for the appointment, transfer, promotion, grant of an increment and award, sanction of leave or rent allowance of a peon or manager, the white elephant is approached.No provincial or geographical representation grade wise has been maintained at Islamabad head office.People of only one province enjoy and run the functions of the Bank.There is no representation of sindh in the higher posts like Directors, Executive Driectors, Senior Executive Directors and above. It is right time to decentralize the structure of the whole ADBP and its functions and matters be settled at provincial level.It is therefore, suggested that at each provincial Head Quarter, the post of vice-president may be created for which senior officers of the Bank may be promoted and may be authorized and made responsible for all affairs including disbursement, recoveries, appointments, promotion, sanction of leave, and rent facilities, grant of increments and awards etc upto the posts of Joint Directors.The promotion, appointment and all others records of the Director and above officers may only be maintained at Islamabad.
(b)External inspection reports
ADBP is being inspected by the State Bank of Pakistan and the Commercial Auditors of the Government of pakistan.All the Audit/Inspection reports may be checked and probe may be made by the National Accountability Bureau (NAB).In this way numerous irregularities can be detected and culprits can be punished. This may be a regular function of the ADBP management.
(c)Internal Audit Reports
At various offices audit is conduted in ADBP.The audit reports compiled in the Audit Departments of ADBP at various offices may also be got probed by NAB/Commercial Auditor/ F.I.A etc.
(d)Group Loaning system
All seasonal loans may be granted at village level to the group loanes.All the mobile credit officers should organize potential groups of farmers within the village, distribute loans to them on joint responsibility basis as adopted in other countries.
The senior most officer of ADBP may be appointed as the President of the Bank.No outsider bureaucrat of World bank or IMF/Forign Banker may be appointed as its President.The new recruitment may be made on competetion basis as a grade two officer and out side deputation or posting or appointment may be banned so that professionlism should be strengthened and boosted up with in the ZTBL.